MINING INFRASTRUCTURE INVESTMENT SUPPORT PROJECT

TERMS OF REFERENCE FOR ENVIRONMENTAL AND SOCIAL IMPACT

ASSESSMENT FOR "INTEGRATED STEEL COMPLEX WITH

INFRASTRUCTURE IN THE DARKHAN-SELENGE REGION" PROJECT

RFP No. WB/MOF/MINIS/CS/QCBS/1.1.3. (d)/2015; Credit No. 4888-MN

Table of contents TABLE OF CONTENTS ........................................................................................................................................ 2

ABBREVIATIONS .............................................................................................................................................. 4

1. Introduction ............................................................................................................................................ 5 1.1. General Background ............................................................................................................................ 5 1.2. Project Initial Screening ....................................................................................................................... 6 1.3. Legal and Policy Issues Assessment ..................................................................................................... 6 Objectives and Scope of Work ................................................................................................................... 8 2.1. Objectives of ESIA ................................................................................................................................ 8 2.2. Scope of Work ..................................................................................................................................... 9 2.2.1 Phase 1:Environmental and Social Scoping Study (ESSS) .................................................................. 9 2.2.2 Phase 2: Environmental and Social Impact Assessment (ESIA) ....................................................... 10

3. PHASE 1. ENVIRONMENTAL AND SOCIAL SCOPING STUDY ..................................................................... 11

3.1 Consultant Tasks ................................................................................................................................ 11 3.2 Indicative Table of Content for Final ESSS .......................................................................................... 12 3.2.1 Project Description .......................................................................................................................... 12 3.2.2 Available environmental and social baseline data .......................................................................... 12 3.2.3 Identification of significant issues and impacts ............................................................................... 13 3.2.4 Stakeholders` and public concerns .................................................................................................. 14 3.2.5 Mitigation measures to be investigated.......................................................................................... 14 3.2.6 Draft Environmental and Social Scoping Study results, Plan for State and Public Consultations .... 15

4. PHASE 2. ENVIRONMENT AND SOCIAL IMPACT ASSESSMENT ................................................................ 16

4.1 Indicative Table of Content and Scope of issues to be covered by ESIA ............................................. 16 4.1.1 Non Technical Executive Summary .................................................................................................. 16 4.1.2 Legal, Regulatory and Policy Framework ........................................................................................ 17 4.1.3 Description of the Project and Project Components ........................................................................ 17 4.1.4 Analysis of Alternatives ................................................................................................................... 17 4.1.5 Baseline Environmental and Social Information and Data .............................................................. 18 4.1.6 Socio-economic-cultural Assessment .............................................................................................. 19 4.1.7 Physical Cultural Resources ............................................................................................................. 20 4.1.8 Economic benefits ........................................................................................................................... 20 4.1.9 Resettlement ................................................................................................................................... 20 4.1.10 Indigenous Peoples ......................................................................................................................... 21 4.1.11 Environmental and Social Impacts .................................................................................................. 22 4.1.12 Cumulative Impacts ........................................................................................................................ 23 4.1.13 Environmental and Social Management Plan (Mitigation, Monitoring and Capacity Development) 24 4.1.14 Mine Reclamation and Closure Plan ............................................................................................... 26 4.1.15 Plan for State and Public Consultation ............................................................................................ 26

5. DELIVERABLES BY THE CONSULTANT ...................................................................................................... 28

5.1 INTRODUCTION ........................................................................................................................................... 28 5.2 DELIVERABLES............................................................................................................................................. 28

5.1.1 Progress Reporting .......................................................................................................................... 28 5.1.2 Environmental and Social Impact Assessment ................................................................................ 28

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6. MANAGEMENT OF THE ESIA WORK ....................................................................................................... 30

6.1 Roles and Responsibilities .................................................................................................................. 30 6.2 Consultant Time Schedule .................................................................................................................. 31 6.3 Ownership and Control of Information, Data and Documents ........................................................... 33

7. REQUIREMENTS FOR THE CONSULTANT TEAM ...................................................................................... 33

8. PAYMENT SCHEDULE .............................................................................................................................. 38

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Abbreviations BP Bank Policy CSR Corporate Social Responsibility DMP Darkhan Metallurgical Plant EBRD PRs European Bank for Reconstruction and Development Performance

Requirements EIA Environmental Impact Assessment EMP Environmental and Social Management Plan ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESSS Environmental and Social Scoping Study FS Feasibility Study GIS Geographic Information System IFC PSs International Financial Corporation`s Performance Standards IFIs International Financial Institutions GoM Government of Mongolia MEGDT Ministry of Environment, Green Development and Tourism MINIS Mining Infrastructure Investment Support MRCP Mine Reclamation and Closure Plan NGO Non-Governmental Organizations OP Operational Policy PC Personal Computer PIU Project Implementing Unit PM Particulate Matter TOR Terms of Reference TSF Tailings Storage Facility UNESCO United Nations Educational, Scientific and Cultural Organization USD United States Dollar WB World Bank

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1. Introduction 1.1. General Background The Government of Mongolia (GoM) has received the Technical Assistance Credit which costs 25 million US dollars from the International Development Association (World Bank) and intends to apply a portion of the proceeds of the credit to eligible payments for the “Integrated Steel Complex with Infrastructure in Darkhan-Selenge Region” Project Feasibility Study under their appropriate Contract.

The Government of Mongolia has identified the need to establish an integrated steel complex with full cycle of processing of the iron ore to finished steel products in Mongolia. In order to do so it is necessary to consider the availability and properties of local raw materials, suitability of other local conditions, infrastructure requirements, current human resource availability, the most suitable production technologies, and to make environmental and socially sustainable development decisions.

It is anticipated that Mongolian economic development will benefit from success in implementing this project, as it will set up foundation for the sustainable development for the manufacturing industry and stimulate development of support industries such as energy, chemicals, transportation and infrastructure and construction etc.

The largest Mongolian steelmaker, Darkhan Metallurgical Plant, which owns Tumurtei, Tumurtolgoi and Hust-Uul iron ore deposits is located in Darkhan-Selenge region of Mongolia. One of the biggest iron ore deposits of strategic importance – Tumurtei locates in this region, which has more advantages with its reasonably established infrastructure, water resource and power supply, urban settlement and several close large coal deposits and so, the region is considered the most suitable location for developing metallurgical industry.

Darkhan Metallurgical Plant has developed the conceptual planning of the “Mining and Metallurgical Complex” project in April of 2014, to implement a complete iron ore processing, reduce current shortage of metal scrap, increase production capacity, add new types of products and expand DMP. The plan was submitted for review to the related ministries and got approval from the DMP Board of Directors and the State Property Committee, afterwards DMP has started execution of the project. The project consists of 2 main stages and DMP currently has completed first stage tasks which are an economical utilization of iron ore deposits, ore mining and processing, development of some infrastructure and setting up of 2 iron ore mines, dry beneficiation plants at the mines and a wet beneficiation plant with its infrastructure near own steel plant. Project’s second stage tasks such as the Study of Suitable Production Technology to produce steel from iron ore, raw materials and technological test work and Pre-Feasibility Study of Direct Reduced Iron Plant have been completed.

The proposed Project could be both technically and economically feasible, however it cannot be considered further without taking into account environmental and social impacts. The environmental assessment work should be conducted so that the results are able to support a due diligence process required for access to international financing sources. The process and detailed requirements described in this TOR are based on World Bank Guidelines but all

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work and the end products of the ESIA must conform to applicable Mongolian Laws and Regulations.

The Project has been classified as Category “A” according to the World Bank Environmental Assessment Operational Policy 4.01.The proposed project, at this time, has been defined in the Report on Initial Economic, Financial, Environmental and Social Screening for the“ Integrated Steel Complex with Infrastructure in Darkhan-Selenge Region Project” that was prepared as a basis for the development of the Feasibility Study TORs.

The works to be done under this TOR by the Environmental and Social Impact Assessment (ESIA) Consultant are components of the Feasibility Study stage of project development. Although it is to be contracted separately from the Feasibility Study work it is necessary to coordinate the ESIA activities and deliverables with other ongoing FS work.

1.2. Project Initial Screening The objectives of the Initial Screening Study were to i) carry out material investigations to suggest suitable metallurgical processes for the steelmaking in Mongolia, and ii) prepare TORs for the studies that should be carried out to prepare the feasibility study, clarify the timing, sequencing and coordination of studies in one implementation plan.

A separate report titled “Final Report for Integrated Steel Complex with Infrastructure” provides full details of the initial screening process.

For reasons of reduction in investment costs, reduction in technological risk by gradual adjustment of product and know-how stabilization by approximation to the final process, the Initial Screening Study suggests developing the Integrated Steel Complex with Infrastructure Project in two stages:

Stage 1: engineering and construction of the iron making plant with associated infrastructure, but without new steel shop, casting plant and mill plant: Depending of the plant location, the existing capacity of Darkhan Metallurgical Plant could be used with or without some modifications.

Stage 2: extension of the iron making plant (if necessary) with related infrastructure as well as engineering and construction the steel shop, casting plant and mill plant.

The Environmental and Social Impact Assessment described by this ToR shall cover both stages of development.

1.3. Legal and Policy Issues Assessment Successful implementation of any project largely depends on strict compliance with all applicable international conventions, domestic laws and policy documents, treaties and bilateral agreements; therefore, it is required to review and scrutinize international conventions, domestic legislations and other policy documents which are directly applicable to the particular project.

Within the framework of legal issues, it is necessary to review all effective international conventions, treaties, and bilateral agreements which Mongolia is a party to and domestic laws, policy documents, national programs essential for the implementation of the project.

Legal review reveals external and internal legal factors that possible affect the project implementation, and its cause or justification, to provide an answer to some public

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misunderstanding about the project from legal point of view, to correctly evaluate potential external and internal risks and its factors for the implementation of the project, to envisage decisive countermeasures against such risks, and to ensure in establishing legal preconditions for successful implementation of the project.

Within such general requirements, the consultant shall ensure the project complies with both Mongolian laws and regulations and with World Bank Operational Policies. World Bank safeguard policies will define the standards and approach used in undertaking the Environmental and Social Scoping Study (ESSS) and Environmental and Social Impact Assessment (ESIA) for the Project.

A preliminary list of all applicable and effective international conventions, bilateral agreements, domestic laws, policy papers essential for the project implementation, has been endorsed to the Initial Screening Report. The consultant shall review this and use it as a basis to develop a legal review to be presented with the work plan at Inception. This list shall not be treated as exhaustive. If there any new circumstances and legal documents emerge during preparation stage of the ESSS and ESIA for the project, such circumstances and legal documents must be covered adequately in the study reports.

It is known that World Bank policies on environmental and social impact assessment are broader in scope than national provisions, as they take into account strategic, cumulative, and induced impacts; and are also in other ways more specific, such as requirements for worker and community health and safety. There is no inherent conflict created by gaps between Mongolian environmental and social laws and regulations and the environmental and social safeguard policies of the World Bank as the latter are equivalent to international treaties, which take priority.

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2. Objectives and Scope of Work

2.1. Objectives of ESIA The ESIA is to be undertaken in order to assess the feasibility of proceeding with project development in accordance with The World Bank’s policies and guidelines.

The purpose of this TOR is to define the work needed for completion of the Environmental and Social Impact Assessments of the “Integrated Steel Complex with Infrastructure in Darkhan-Selenge Region Project”.

The work described in this TOR is part of the planned Feasibility Study for the Project that is being done by the Mining Infrastructure Investment Support (MINIS) Project, working under the Ministry of Industry with financing by the World Bank. The Project is being developed based on World Bank guidelines and international standards with the anticipation that international financing will be required for construction.

The objectives of the environmental and social assessment are to:

• Identify the project impact area and project’s area of influence;

• Document the key physical, biological and socio-economic and cultural baseline conditions;

• Identify key project structures and components and the activities involved in the construction and operation phases that have a potential to change the existing baseline conditions;

• Involve public opinion in the decision-making process related to the identification of potential impacts, mitigation measures, and project alternatives;

• Identify potential positive and adverse impacts for various proposal alternatives;

• Analyse the most critical adverse impacts for the environmentally/economically best alternative;

• Prescribe appropriate, practical, cost effective and site specific mitigation measures for the identified adverse environmental impacts to avoid or minimize or compensate adverse impacts and enhancement measures for the capitalization of positive impacts;

• Outline the elements of environmental mitigation, management, monitoring and auditing and prepare an Environmental Management Plan (EMP) including Land Acquisition and Resettlement Plan, Indigenous and or Vulnerable People Development Plan; and Gender Development Plan;

Provide recommendations on the overall feasibility of the project from environmental/social prospective to decision makers for further action regarding the development of the project

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2.2. Scope of Work

The ESIA and the scope of work under these TOR also will be carried out through two phases and will have two main deliverables:

Phase 1: Environmental and Social Scoping Study (ESSS) Phase 2: Environmental and Social Impact Assessment (ESIA)

The assessments in phase 1 and 2 are to investigate all potential impacts and required mitigation measures and where applicable to meet the requirements of the following World Bank Operational Policies:

OP 4.01 Environmental Assessment

OP 4.04 Natural Habitats

OP 4.10 Indigenous Peoples,

OP 4.11 Physical Cultural Resources,

OP 4.12 Involuntary Resettlement

OP 4.36 Forestry.

Additional guidance may be drawn from the MINIS Environmental and Social Management Framework (ESMF) and other relevant World Bank safeguards policies and corresponding requirements defined in Mongolian laws and regulations. The ESIA Consultant is required to perform all necessary studies and investigations to support full ESIAs for the Project, including a structured Public Consultation Program.

The project has been classified as a Category A under OP/BP 4.01, requiring a comprehensive ESIA and consultations with stakeholders including project-affected communities and local nongovernmental organizations (NGOs) about the project's environmental aspects taking their views into account during preparation of the ESIA, once a draft EA report has been prepared and throughout project implementation as necessary to address EA-related issues that affect them.

The ESIA will include all ancillary and off-site facilities and structures necessary for the development, operation, and future closure of the Steel Complex and its subprojects. Associated infrastructure includes, amongst others, the iron ore and coal mine areas where the overburden will be disposed, as well as storage areas for iron ore and coal, the tailing storage facility, access roads etc, i.e. all structures necessary for the full functioning of the Steel Complex.

The ESIA will assure the stakeholders that all potentially significant environmental and social impacts are taken into consideration, that the public and particularly the directly affected communities have been properly consulted and mitigation measures and monitoring identified and agreed.

2.2.1 Phase 1:Environmental and Social Scoping Study (ESSS)

The tasks under the ESSS are primarily focused on identifying the impacts to be assessed, how these impacts will be assessed, which of these impacts are significant and most

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important as well as the geographical area of influence to be considered for each of the different environmental and social parameters. The ESSS is to include a strategic assessment comparing the findings of the initial screening studies with feasible alternatives,. In addition, the ESSS will address the following:

(i) the types of alternatives which ought to be considered, drawing and expanding on a number of analysis conducted to date;

(ii) the site location and influence zone (iii) the available baseline data and which further baseline studies are required to

characterize the existing environment, including salient social aspects; (iv) any special requirements for baseline studies regarding their geographical extent or

timing e.g. because of seasonal changes in fauna and flora; (v) the level of detail of investigations required; (vi) types of emissions and impact modeling, in line with international accepted

standards, to be used to estimate the magnitude of environmental effects; (vii) the types of mitigation measures to be considered and monitoring to be required; (viii) the Plan of State and Public Consultation to inform the stakeholders and public

through public consultations about the scope and preparation of the ESIA, the results of the scoping study, including identification of the main stakeholders and their concerns; and

(ix) agreement on the detailed scope and structure of the ESIA with the main stakeholders under the proposed Project, including further consultations to be carried out during the environmental and social studies.

2.2.2 Phase 2: Environmental and Social Impact Assessment (ESIA)

The detailed tasks of Environmental and Social Impact Assessment will be tailored and concluded based on the findings in the scoping study, but will include in any case:

(i) determine and further collect where needed the baseline data according to the ESSS findings and guidance;

(ii) for the proposed project and its alternative scenarios, discuss the technical, economic, social and environmental parameters and determine and assess the identified impacts;

(iii) prepare the Environmental and Social Management Plan, identifying the required actions needed to avoid or mitigate environmental and social impacts of concern that will be integrated into the design (the proposed Mitigation Measures) as well as the required Monitoring measures;

(iv) identify the responsibilities for implementation as well as oversight for the identified mitigation and monitoring measures including an estimate of investment and/or operating budget required; and

(v) prepare a final ESIA study that will comply with the World Bank’s Requirements, Mongolian and International Standards and Regulations.

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3. Phase 1. Environmental and Social Scoping Study Consultant Tasks

Under Phase 1, the consultant will:

a) gather available data on the existing operations in and emissions from the DMP and available information on planned sub-projects, including assessed alternatives and further viable alternatives which ought to be considered, drawing and expanding on existing studies conducted,

b) Study the capacity market for exportation and economic viability of the project. c) Study all type of product in term of need for exportation. d) Study the transportation cost for exportation e) If the Integrated Steel complex need more energy it will be necessary to find were this

energy will come from and the cost should be consider in the viability of the project f) establish availability of baseline data and gather available baseline information on state

of the environment on all the sub-projects and including any special requirements for baseline studies related to their geographical extent or timing (e.g. because of seasonal changes in fauna and flora),

g) consult the stakeholders, and particularly the directly affected communities, on their concerns related to the sub-projects,

h) identify environmental and social issues and impacts of importance related to construction, operation and closure and land reclamation of the Steel Complex and its sub-projects and define development alternatives for these subprojects and identify the geographical zone of influence of the Project for the different environmental and social parameters and the specific environmental ecosystems on which the cumulative impact assessment should focus (in any case air, water and soil impacts); identify the waste water during construction an operation and illustrate the water balance of the project: water supply needed for industrial and domestic use (drinking water). Indicate the water treatment and volume needed.

i) Air pollution. The consultant should first determine the initial concentration of ambient air and study the emission of the project especially heavy metal concentration emission.

j) define the missing baseline information which should be included and properly assess the environmental and social impacts as well as the mitigation and monitoring measures which are to be considered as far as already possible at this early stage,

k) prepare the ESSS, l) identify the main stakeholders and their concerns, prepare a Plan for State and Public

Consultations and consult the scope (Terms of Reference) for the ESIA and the results of the scoping study with the public and stakeholders;

m) agree on the scope and structure of the ESIA and communication plan with the main stakeholders under the proposed Project, including further consultations to be carried out.

The Consultant will visit the sites of DMP including Tumurtei and Tumurtolgoi iron ore mine areas, the Iron ore processing plant, and TSF to gather available data on the existing practices and identify the range of impacts from the existing facilities and the likely scope of environmental and social impacts to be realized with the proposed project. Information on the proposed project will be gathered from relevant government officials and other stakeholders.

For the purpose of stakeholder consultations in the scoping phase, the consultant should prepare a list of organizations and individuals who are connected/interested in the proposed

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project and update this list as the preparation of ESIA develops. All the issues raised by the public should be analyzed and taken into account in the further planning of the both phases for ESSS and the ESIA preparation.

3.2 Indicative Table of Content for Final ESSS 1. Introduction 2. Project description and applicable standards to be adhered to 3. Alternatives to be considered in the ESIA 4. Identification and presentation of available environmental and social baseline data and

information gaps 5. Identification of potential significant issues and impacts (environmental and social

assessment) 6. Results of Public Consultations on the draft ESSS and the proposed ESIA scope and

identification of stakeholders` and public concerns 7. ESIA scope with description of required environmental and social topics to be

investigated, methodologies and modeling to be used and further data collection requirements

8. Mitigation measures to be investigated in the ESIA 9. Detailed work plan for the ESIA, including timeline of activities and other necessary

studies and data collection as required from the gap analysis 10. Plan for State and Public Consultation

Further details on content of the ESSS provided below.

3.2.1 Project Description

In the section of project description, the location of the proposed project is to be described, describing the site and surrounding area and communities. The following basic technical information shall be included for all parts of the proposed Project: the area, size and capacity of the proposed Project; basic iron ore characteristics and anticipated extraction and processing techniques and transport, envisaged associated and off-site infrastructure, all structures necessary for the full functioning of the new Integrated Steel Complex. The project description should also include all WB requirements, international and Mongolian standards that the proposed Steel Complex should adhere to.

The project description should include maps which are to include topographic contours as well as locations of relevant surface waters, roads, railways, villages and communities, administrative boundaries and existing land use.

3.2.2 Available environmental and social baseline data This section will identify available environmental baseline data which will include physical, biological, socio-economic and socio-cultural aspects of the environment. The data will be gathered from governmental organization, the DMP management and mines in operation, NGOs and relevant research institutions. Substantial amounts of environmental data and details on existing environmental problems have been specified in numerous studies undertaken in the past, including the existing EIA reports of DMP; these identified issues will be catalogued as part of this section. The ESSS will, in particular, identify the quality of available data and missing baseline information, i.e. perform information gap analysis that will be required for the full impact assessment under the ESIA. The ESSS will define how this data will be

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acquired (field survey, monitoring, interviews, etc.) as well as time required for the acquisition of data.

Based on available baseline data and information, the consultant will establish baseline environmental and social conditions of the project site including, climate, topography, geology, soil types, geohydrology, use and quality of surface and ground water, air quality, biodiversity, noise, land use pattern, cultural and historic features, and socio-economic aspects. Alternatives to be considered The ESSS will describe and consult on the alternatives which will be analyzed during the ESIA, taking into consideration and expanding on the Initial Screening Study that evaluated the different technologies and project siting options. The ESSS should take into account also the Feasibility Study findings. These Project alternatives will include at least: 1. No-project scenario 2. Alternative steel supply strategy scenario 3. Alternative design or layout scenario 4. Alternative technology scenario 5. Alternative siting options

3.2.3 Identification of significant issues and impacts

This section will identify common impacts generally associated with metallurgical plants and open iron ore mining. For the steelmaking plant, the study will look at minimum at impacts associated with dust and emissions to the atmosphere: PM2.5, PM10, SiO2, CO, CO2, N2O, SO2, H2S among others. Wind direction as to be presented for modeling emission. Consultants will analyze all relevant pollutants associated with iron ore and coal emissions and associated combustion by-products to ensure that all significant pollutants have been identified for the assessment. The results of the exercise will be reported in the ESSS so that agreement can be reached on the pollutants list prior to the ESIA.

The section will assess the quality of information and identify any possible gaps necessary to be filled for a full assessment of the impacts. The required methods for covering these gaps should be described in detail.

The Consultant will identify requirements for emissions and impact (computer) modeling in line with acceptable international standards for all relevant environmental impacts and present with the justification as part of the draft Scoping Report.

Consultants will also prepare a preliminary water balance for the different uses of water.

The impact evaluation under the ESSS and later in more detail under the ESIA will also calculate the carbon footprint and current other air emissions in comparison to with carbon footprint and air emissions with the proposed project.

The scoping exercise will include the identification of the “Zone of Influence” of the proposed Project, i.e. the different geographic areas which need to be taken into account during the ESIA for each of the different environmental and social parameters, e.g. air, water, social impacts.

Worker protection and safety: The ESIA should present the protection measure for worker during the construction and operation stage, especially the noise protection. The construction camp should be map and present the worker capacity. Furthermore direct job during each stage of the project should be assessed.

Transmission line: Identify the capacity, length and route of a new line if necessary.

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Road: define whether a new road is necessary for transportation of materials during construction and operation stages.

The Social issues under this ToR will cover the salient impacts on people living in the area of influence of the project. This will need to cover the whole area to be affected during the lifetime of plant operations. These impacts include possible impacts on land use and land-based livelihoods; the consultant should illustrate the number of houses and distance near the plant; land acquisition and resettlement associated with the proposed project and its associated facilities; employment and gender-related issues; public health and social services, labor and working conditions; and community health and safety. The social assessment will describe the current social and economic situation and possible impacts of the proposed project on directly- and indirectly-affected communities. This socio-economic information will develop a robust sampling base of at least 20% of affected population and entities in order to provide a contemporary baseline needed for evaluation of impacts and, if required, measures to be carried out to mitigate negative impacts and to enhance positive impacts and opportunities. The detailed methodology for the social assessment will be presented in the draft Scoping Report. Baseline data should be adequate for the ESIA to be able to identify and assess general social impacts, including particular impacts and risks for vulnerable groups, in accordance with OP 4,01 Environmental Assessment as well as specific impacts related to OP 4.12 on involuntary resettlement, OP 4.11 on Physical Cultural Resources and OP 4.10 on Indigenous Peoples.

3.2.4 Stakeholders` and public concerns

This section will include the identification of the relevant stakeholders, identifying the range of community, public and stakeholders concerns about the proposed project as recorded in consultations on the previous studies, the draft ESSS and the draft EISA scope and identified through other channels. Stakeholder Analysis and Engagement: identify people with concerns, interests or rights affected by potential changes in access to or use of natural resources, and assess which issues are most likely to be affected by competing or divergent interests (including, but not restricted to competition for natural resources, unclear water or land rights, distribution of project entitlements or benefits, lack of internal community cohesion, differing positions on project choices, quality of consultation and participation) Document understanding of current community awareness and concerns about the project, providing clear communications strategies for each stakeholder group. Also ensure that the results of consultations are shared with the affected stakeholders that took part.

3.2.5 Mitigation measures to be investigated

Key applicable mitigation measures based on good international practice for the iron processing sector and in line with WB requirements and Mongolian legislation and applicable lenders performance standards will be presented in this section and further detailed in the ESIA. With regard to the Socio-economic Assessment, the ESSS will also specify the detailed scope and methodology of obtaining a statistically representative sample of household and economic entities surveys that will be executed as part of the ESIA and provide clarification on acceptable methodologies.

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3.2.6 Draft Environmental and Social Scoping Study results, Plan for State and Public

Consultations The Consultant will prepare the draft ESSS in English and Mongolian for consultations after approval and integration of comments from the working group, the World Bank and the Panel of Experts. The draft ESSS will be accompanied by the proposed Plan for State and Public Consultation to be approved by the Ministry of Industry and World Bank.

The consultant is also advised to refer to the Aarhus Convention in terms of the Plan for State and Public Consultation. The Consultant will be in charge to organize and document public consultations on the draft results of the ESSS and the proposed scope of the ESIA, including all impact modeling to be done in line with international acceptable standards and focusing on documenting how public concerns have been considered and addressed.

Public Consultations will be organized in line with the World Bank Policy on Environmental Assessment (OP/BP 4.01) and Mongolian legal requirements under the EIA law. The ESSS and the detailed scope and work plan for the ESIA will be disclosed in-country in English and Mongolian languages and in the World Bank`s Infoshop in English. The consultation process will include standard record keeping for each meeting: a formal record should be made including the agenda, signed lists of participants, a summary of the issues discussed and copies of materials provided to the participants.

Based on the comments received from the public consultations, the final ESSS and the detailed scope and work plan of the ESIA will be prepared and approved by the Ministry of Industry, the World Bank and the Panel of Experts (pending a decision to form one). The ESIA scope includes a detailed description of required environmental and social topics to be investigated, methodologies and modeling to be used and further data collection requirements.

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4. Phase 2. Environment and Social Impact Assessment The ESIA process will include:

• Detailed impact assessment • Development of detailed mitigation measures • Drafting of the ESIA, Environmental Action Plan, Plan for State and Public Consultation

and Non-Technical Summary

After the approval of the ESSS and agreement on the detailed scope and structure of the ESIA, the consultant will start preparing the ESIA document. The consultant will acquire in the manner defined in ESSS all missing data on baseline and those necessary for evaluation of impacts. The ESIA document will address all the issues identified in the ESSS. After preparation of the draft document, and the review by the Bank and the Government and the Panel of Experts, the document will be disclosed in Mongolian and English languages and publically discussed. All comments received from the public will be recorded and addressed in the final version of the study.

4.1 Indicative Table of Content and Scope of issues to be covered by ESIA

Below is the indicative table of content for the ESIA, which is to be completed and confirmed, based on the outcomes of the ESSS:

1. Non-technical Executive Summary 2. Legal, Regulatory and Policy Framework 3. Description of the Project and Project Components 4. Analysis of alternatives as identified and agreed in the ESSS 5. Baseline Environmental Information and Data 6. Socio-economic Assessment 7. Environmental and Social Impacts 8. Cumulative Effects 9. Environmental and Social Management Plan 10. Mine Reclamation and Closure Plan 11. Plan for State and Public Consultation and Records

Overview of ESIA Report Contents

The following sections are a first indication of the deliverables under the ESIA. The detailed contents of the ESIA will be fully informed by the results of the ESSS.

4.1.1 Non Technical Executive Summary This section will provide a summary of: (i) the project objectives, (ii) the project components of the proposed project; (iii) a summary of the anticipated environmental and social benefits of the proposed project; (iv) a summary of the overall findings from the ESSS and ESIA, including potentially significant adverse environmental and social impacts related to the project`s operations that require mitigation/monitoring etc.; (v) a summary of relevant corrective action plans, environmental investments and the Environmental and Social Action Plan.

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4.1.2 Legal, Regulatory and Policy Framework

This section will describe applicable environmental and social legal, regulatory and policy requirements and associated regulations and standards of the Government of Mongolia and World Bank Group and should also provide a gap analysis of the key differences between Mongolian legislation, relevant World Bank Group Environmental, Health, and Safety Guidelines and the World Bank Operational Policies, including OP 4.12. The section should also provide procedures to be followed for obtaining all relevant permits for start of construction works. Future steps should be defined, emphasizing the responsibilities for individual steps, documentation and content of documentation as well as the timeline for permitting process.

4.1.3 Description of the Project and Project Components

The section will provide a brief overview of the Metallurgical Sector in Mongolia, the Project background and specific description of the Project components.

The ESIA will cover the extension and operation the DMP and the development, operation and closure plan of iron ore and coal mines and the associated infrastructure. The ESIA will provide the capacity of production of the plant (Ton/day).

The following technical information shall be included: size, technologies and capacity of the proposed project, including mining and metallurgical plant operations, all associated infrastructure (construction and operation workforce, housing, water supply, power connection lines, treatment facilities, roads, etc.), description of the construction, operation, and mine closure activities (phased construction activities, associated manpower, opportunities for local labor), iron ore and coal characteristics, extraction and transport of iron ore and coal (extraction techniques, transport of coal to plants, technological processes), an overview of the water supply and water balance (indicating discharge, recycling, evaporation, surface and ground water use, treatment etc.), pollution treatment and abatement equipment (precipitators for fly ash and fly ash storage, bottom ash collection, transport and storage etc.), hazardous waste use, handling, and storage (diesel, fuel gasoline, lubricants), worker health and safety, emergency preparation and response (including community response and notification) temporary construction areas; site location alternatives considered; clean-up activities; implementation schedule; staffing and support, and worker facilities and services. Some of this information may not be known at the beginning of the ESIA, as some of the technical specs of the facility have not yet been fully defined by Feasibility Study.

Maps (in a common GIS format) are required at appropriate scales to show project-related development sites, pre-construction and construction activities as well as surrounding areas likely to be impacted (areas of influence-direct and indirect). These maps should include topographic contours as well as locations of major surface waters, roads, railways, villages and communities, administrative boundaries and existing land use.

4.1.4 Analysis of Alternatives

The section will, for the alternative development scenarios identified under the ESSS, present a comprehensive description of the alternatives as identified and agreed under the ESSS and their technical, economic, environmental and social features. This section will then further describe how the Project impacts compare to those of the identified alternatives and will be concluded with an assessment whether findings from this comparison could improve or in any other manner could inform the development of the Project.

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4.1.5 Baseline Environmental and Social Information and Data

Based on the approved ESSS for the proposed Project, which provides definition of the scope and significance of direct and indirect impacts of the proposed Project, including the area of influence and the alternatives under study, the Consultant shall assemble, evaluate and present the environmental baseline data as it relates to the proposed Project. Based on the ESSS, missing data will be acquired as suggested (field surveys, interviews, and consultations to fill any information gaps critical to the potential impacts and for development of mitigation measures; see related ESSS section for which further data collection and survey work is expected). The environmental description should be concise and focused on those environmental sectors where potential impacts of the proposed project can be expected. The information should be presented in illustrative maps at an appropriate detailed scale.

The consultants will need to present environmental baseline data on the following items, amongst others:

Physical environment: geology; topography; soils; climate and meteorology; ambient air quality; surface and groundwater hydrology; existing sources of and air emissions; existing water extraction and water users and water pollution discharges; and receiving water quality; all existing operational and past mining and associated processing facilities.

Biological environment: flora; fauna; rare or endangered species; sensitive habitats, including parks or preserves, significant natural sites, etc.; species of commercial importance; and species with potential to become nuisances or dangerous, nature and sensitivity of important ecological functions. Impact on river ecosystem and aquatic habitat. The consultant has to determine the impact on river and aquatic habitat near the Plant or in the basin of the Plant.

Flora

Identify and list the plant species occurring within the project site. Determine the main groups of plants, their characteristics and biomass, and provide comments. Determine which plant species are rare, endangered or acclimatized, their distribution and protection statuses. Also, produce a map of the vegetation cover for the entire project and regional area.

During the field study of the environmental baseline assessment, select an area where the reserves and crop yields of the plant species can be determined and make measures of the vegetation growth. It would be appropriate to determine the vegetation cover size by using the most suitable method from the following ones: visual, cover projection or quantity-weight methods.

Fauna

Determine the wildlife species occurring in the territory, their distribution ranges, habitats and movements, as well as the species that became extinct or fled due to economic activities, their populations and future tendency. During the field study of wildlife, identify the invertebrate and vertebrate species, their concentration and population sizes in accordance with special methods, in order to provide a baseline assessment on the wildlife of the region. Make a list of rare, endangered and critically endangered animals, and evaluate the current status of their populations and habitats.

Socio-economic-cultural environment(see below): (include both present and projected where appropriate): population; land use, particularly agricultural land use in the area; transportation infrastructure; planned development activities; settlement and community structures; employment; distribution of income, goods, and services; recreation; health; and cultural

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properties. This section should provide information regarding those community members more likely to be directly affected by project activities.

The consultants will provide general information about the type of health implications which are typically connected with metallurgical plants. The ESIA will assess general social impacts, including particular impacts and risks for vulnerable groups, in accordance with OP 4,01 Environmental Assessment as well as specific impacts related to OP 4.12 on involuntary resettlement, OP 4.11 on Physical Cultural Resources and OP 4.10 on Indigenous Peoples.

4.1.6 Socio-economic-cultural Assessment

The social assessment will describe the current social and economic situation and possible impacts of the proposed project on directly- and indirectly-affected communities. This socio-economic information will develop a robust sampling base of at least 20% of affected population and entities in order to provide a contemporary baseline needed for evaluation of impacts and, if required, measures to be carried out to mitigate negative impacts and to enhance positive impacts and opportunities. This social assessment will be fully gender informed as the household surveys will be based on roughly equal numbers of man and women, separate woman focus groups will be organized and specific questions related to development problems and priorities for women will be integrated into the questionnaire.

The Consultant will gather data for the report using a combination of secondary (existing reports and statistics) and primary household survey data based on a statistically reliable and representative sample to describe the salient demographic and socio-economic characteristics of the population in the project`s area of influence. This assessment should: verify and update as needed:

(i) anticipated social and economic impacts; (ii) current social and economic baseline characteristics; (iii) assess social and economic impacts; (iv) describe measures for mitigation of adverse impacts and enhancement of

positive impacts; and (v) identify community development opportunities and priorities.

The Consultant will engage specialized social science (anthropological/sociological) expertise throughout the Social Assessment, and seek advice from World Bank social experts to resolve any difficult issues in interpretation of this directive.

It is important to identify, in the area of influence how all communities are currently collecting water from the aquifer, including collection techniques, storage facilities and practices, quantities of water extracted by each community and/or water use group. This effort will also summarize the end use of this water, specifically how much is used on a monthly basis for drinking, livestock and agriculture. Based on this analysis and consultation with affected parties the consultant will provide several water use scenarios for the proposed project and its effects on local water users in the area of influence. These scenarios shall predict how each water use scenario would affect the economic life of each community, impacts related to human health and livestock, farming and grazing practices, land capability, property rights, and water access, etc.

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4.1.7 Physical Cultural Resources

Measures should be undertaken to identify, preserve and promote any significant cultural heritage in the area. Archaeological, historical and cultural findings on the territory of the project have not yet been detected1. However, it is necessary to plan measures to protect the cultural heritage following the OP 4.11 of the World Bank. A detailed Archeological field survey shall be conducted in the proposed area of influence of the project, along road and transmission rights of way and sites for technical facilities. A cultural heritage management plan (including a procedure for Chance Finds during construction or operations) shall be developed following the O.P 4.11 of the World Bank and shall be included as a component of the Environmental Management Plan.

4.1.8 Economic benefits sharing

The construction of an integrated steel complex has many potential economic benefits for the local population and in Mongolian in general. It will be important to identify the potential employment numbers and types of opportunity during the construction, and operation. Furthermore an economic study should present the economic benefits of the project. A process for prioritizing local area employment and benefits sharing should be proposed.

4.1.9 Resettlement

The Consultant Team will review the potential need for population resettlement based on the Initial Stage Study Report and Recommendation. Determine need for resettlement in relation to project implementation, if any, will be in accordance with the WB policy 4.12. Development of the Resettlement Plan will include cost for land acquisition either under private or leased categories owned by residents and organization, compensation for a property dismantling, relocation and resettlement.

Interview and exchange opinions with residents to be affected and receive their opinions on resettlement options, in order words, pay attention to each resident or household to be provided with land and potable water etc. to meet their satisfaction.

The Consultant shall study social and cultural specific characteristics of the targeted group for resettlement and determine their average life level. Avoid involuntary resettlements and provide conditions to receive benefit from the project to meet requirements in the OP4.12 of the WB.

Introduce and discuss the resettlement plan with the public. It shall be discussed and approved by the aimag and soum’s Citizen’s Representative Hural in prior submittal to the Government of Mongolia.

The Consultant Team shall follow the latest approved law of Mongolia and WB policy in activities related to resettlement.

(i) Resettlement analysis and documentation: evaluate options to avoid and minimize resettlement, identify all significant impacts on land and resources needed for the project2 (including informal or formal practices of recessional agriculture or transhumance3, identify all social groups and document the patterns of water and land use/tenure, with a focus on risk and vulnerability, identify all significant impacts

1Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014 2Include all “associated facilities” in the project footprint determination (including any relocation or replacement sites

for those displaced) and document the amount of land used for the project clearly, using maps and other visual tools. 3 Include all permanent and temporary land use for the project, all restrictions in access to or use of land, or water and

includes structures, income, trees and crops, public assets, and cultural property affected. 20

(on both physically displaced and economically affected people), conduct a 100% census, sample socioeconomic survey, and verification of ownership of assets to be acquired, recommend clear eligibility criteria defining categories of affected persons according to severity and types of impacts, tenure, types of assets affected and vulnerability of those affected. Participatory social assessment tools (eg. Focus group discussions, individual interviews, participatory exercises) should be utilized in the preparation of resettlement instruments

The cost and compensation related to resettlement shall be included as part of a Resettlement Action Plan, attached as a separate document to the Environment Management Plan.

(i) Resettlement plans include:

a. Documented consultation with those affected during planning,

b. Clear options and choices of mitigation measures4, including involvement in selecting relocation sites and replacement assets,

c. Inventory of affected assets, with methods for valuing market or replacement cost of affected assets,

d. Clear procedures for delivery of entitlements,

e. Budget and schedules of the implementation process, linking the schedule of resettlement with civil works packages, and

f. Livelihoods at the new sites and in the new activities can improve, or at least maintain net incomes and monitoring mechanisms and indicators adequate to credibly measure results.

4.1.10 Indigenous Peoples

Verify and review potential factors related to indigenous people in the project territory by reviewing the pre-feasibility study and need to identify focus groups. If necessary the Consultant Team shall develop a standard for determining Indigenous People in Mongolia.

Study society and culture and sensitivity of the indigenous people to be affected by the project activities following OP 4.10.

• Identify characteristics related to indigenous people with cultural heritage and evaluate and study assessments performed by others.

• Identify worshiped natural places important to their intelligent mind-set within their territory occupied for generations.

The Consultant Team shall prepare an analysis of important indicators such as: demography, social, cultural, and political and inherited lands, lifestyles and natural resources.

In preparing this study, it will be necessary to identify negative and positive impacts from the project to indigenous people and produce a “Development Plan” after consultations with people and local administrative organizations and leaders in the society.

4Including community mechanisms for assets that are not owned by individual or households, land, compensation, livelihood and income restoration options. Entitlements should be commensurate to the magnitude and severity of impacts. Include the principle of “land-for-land” compensation for affected peoples whose livelihoods are land-based. . If the “land-for-land” principle cannot be applied, there must be a clear and documented justification provided.

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(i) Indigenous Peoples: Conduct and document a culturally appropriate process of free,

prior and informed consultations leading to broad community support, and producing:

a. Identification of the land and territories that indigenous peoples have traditionally owned or customarily used or occupied, and the natural resources on which they depend;

b. Assessment, based on free, prior, and informed consultation, with the affected Indigenous Peoples’ communities, of the potential adverse and positive effects of the project on indigenous peoples;

c. Assessment of the vulnerabilities of and risks to indigenous peoples communities from the project, given their close ties to natural resources;

d. Plan actions that either avoid adverse impacts or, where avoiding impacts is not feasible, minimizes, mitigate or compensates for those adverse effects; and

e. Plan actions to ensure indigenous peoples receive culturally appropriate benefits under the project.

f. Participatory social assessment tools (eg. Focus group discussions, individual interviews, participatory exercises) should be utilized in the preparation of indigenous peoples planning instruments

4.1.11 Environmental and Social Impacts

Based on the approved ESSS, the Consultant shall list, model and describe all relevant potential environmental and social impacts. The environmental impacts and social influences will be categorized under pre-construction, construction, operations of the Integrated Steel Complex and the iron ore and coal mines.

Based on the identified requirements and the justification and approval of the proposed impact modeling for the different environmental impacts, the Consultants will present the outcomes of the modeling and scenarios in a format easy to understand for all stakeholders and public and clearly explaining the baseline data which were used, the assumptions applied and the differences and impacts of the scenarios. This will include ecosystem impacts of the Integrated Steel Complex.

Consultants will also indicate health effects typically associated with pollutants related to steel plant, iron ore and coal mine and other sources of air pollution. Incremental impacts of the proposed Project will be analyzed (with and without extension of DMP) according to the air quality standards taking into account World Health Organization standards. These analyses will help determine the reduction of short- and long- term mortality risks that Mongolia can achieve by reducing concentration levels of ambient air pollutants.

The Consultant will make efforts and pay great attention to the graphical presentations of the results in graphs, on maps etc. to present the impact results in a manner that will make them accessible and minimizes effort to interpret the results and assess the main impacts of the proposed project.

The environmental description and baseline data should be adequate to inform the development of a Biodiversity Action Plan as a component of the Environment Management Plan including biodiversity restoration programs and compensation/offset plans. The Biodiversity Action Plan should focus on mitigation of impacts on main and critical species identified in the project area of influence and appropriate to the potential impacts on critical habitats.

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Where applicable the assessment of impacts on water resources should include engagement with the Kharaa- Yuruu, River Basin Administration and other relevant organizations. The consultant should work with the River Basin Councils in their coordinating roles to engage community proposals for water protection and water efficiency with regard to accumulation of water resources for large scale infrastructure and extractives. The baseline data and engagement with relevant stakeholders should be adequate to develop a Water Resources Management Plan as a component of the Environment Management Plan.

4.1.12 Cumulative Impacts

The ESIA will as well include a specific section of the report that provides a discussion on cumulative impacts (as they affect air, groundwater and surface water, land use and social issues) and investigate potential trans-boundary impacts of the proposed Project, specifically for air quality and water uses impact. This section should include a review of the current and potential impacts from existing investments, the proposed Project and other potential projects, including other potential mining projects which could be under consideration). This analysis should be supported by figures, tables and maps as appropriate.

The Consultant will identify and compare positive and negative cumulative impacts within the project area. The Consultant should closely review the suggested methods in the guidance of cumulative impact assessment of International Finance Corporation (IFC, 2013 , page 435 ) and Mongolian guidelines for cumulative impact assessment. The Consultant is responsible for explaining the scientific rationale for the selection of all methods that will be applied during the cumulative impact assessment. The ESIA Consultant will analyze the proposed project on a regional basis and identify the likely impacts that will occur during implementation and over the operating life of the project. The consultant will consider current and known planned extractive resources projects and consumers as a potential source of cumulative impact (in addition to all linked ancillary facilities). This analysis shall focus on Valued Environmental and Social Components (VECs) identified that reflect public concern about social, cultural, economic, or aesthetic values, and also the scientific concerns of the professional community. The Cumulative Impact Assessment (CIA) should meet the following objectives:

• Assess the potential impacts and risks of a proposed development over time, in the context of potential effects from other developments and natural environmental and social external drivers on a chosen VEC.

• Verify that the proposed development’s cumulative social and environmental impacts and risks will not exceed a threshold that could compromise the sustainability or viability of selected VECs.

• Confirm that the proposed development’s value and feasibility are not limited by cumulative social and environmental effects.

• Support the development of governance structures for making decisions and managing cumulative impacts at the appropriate geographic scale (e.g., surface and ground water resources, development of extractive resources, regional landscapes management).

• Ensure that the concerns of affected communities about the cumulative impacts of a proposed development are identified, documented, evaluated and addressed.

• Manage potential reputation risks.

5Source: http://www.ifc.org/wps/wcm/connect/3aebf50041c11f8383ba8700caa2aa08/IFC_GoodPracticeHandbook_CumulativeImpactAssessment.pdf?MOD=AJPERES

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Assessment of cumulative impacts should employ information from a variety of instruments including, regional and local environmental, social and resource studies, programs and/or planning documents; strategic, sectoral, and regional assessments; project impact assessments, cumulative impact assessments, and targeted studies on specific issues.6The assessment of cumulative impacts should be adequate to inform the development of a Cumulative Impact Action Plan explaining how such impacts shall be avoided, if unable to be avoided then minimized and compensated for, or in the last resort, offset.

4.1.13 Environmental and Social Management Plan (Mitigation, Monitoring and Capacity Development)

The consultant will prepare an Environmental and Social Management Plan (EMP) for both construction and operational phases to identify:

(i) the set of mitigation responses to potentially adverse impacts; (ii) the institutional structure and strengthening required to ensure that mitigation

measures are taken; and (iii) the monitoring program to implement to verify compliance with the recommended

mitigation, and measure the level of impacts produced by the proposed project.

Specific details concerning each of these EMP components are discussed below. The Environmental and Social Management Plan will be in line with Bank`s OP 4.01; and include a clear Mitigation Plan and Monitoring Plan according to the Bank requirements of the OP 4.01. The EMP should clearly present estimated costs affiliated with proposed mitigation and monitoring actions as well as the parties/institutions responsible for each item of the EMP implementation.

Mitigation Measures Plan- The consultant will present a table of all impacts for the pre-construction, construction, operations and decommissioning phase for all key project components. The preconstruction/design section of the matrix will include recommendation for the design phase to avoid certain impacts. The matrix will include

(i) significant impacts to be expected, (ii) proposed mitigation measures and their proposed timing, (iii) which party will be responsible for incorporating the mitigating measure into the

proposed project during construction and operation and which authority will be responsible for providing oversight that the mitigation measures are taken correctly; and

(iv) estimated budget of the proposed mitigation measures and allocation of financing responsibilities.

The consultant shall also show relevant mitigation measures in a spatial representation, such as map or diagram, with precise location of such mitigation measures.

Environmental and Social Monitoring Plan - The consultant will prepare a short-term and long-term environmental and social monitoring program during metallurgical plant and mine design, construction, and operation as well as for mine closure. This will include:

a) a specific description, and technical details, of monitoring measures required, including the parameters to be measured, methods to be used, sampling locations, frequency of

6Good Practice Handbook Cumulative Impact Assessment and Management: Guidance for the Private Sector in Emerging Markets, IFC, 2013

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measurements, detection limits (where appropriate), and definition of thresholds that will signal the need for corrective actions in line with the standards which are applicable; and

b) monitoring and reporting procedures to i) ensure early detection of conditions that necessitate particular mitigation

measures, and ii) furnish information on the progress and results of mitigation.

The EMP will also consist of proposed institutional arrangements for the grievance mechanism for the population surrounding the proposed Integrated Steel Complex. Grievance Mechanisms shall include accessible procedures to address grievances by the affected people and communities arising from project implementation. When designing the grievance procedures, assess the availability of judicial recourse and existing customary dispute settlement mechanisms.

The monitoring plan will also consist of costs estimates of the proposed monitoring measures, the key parties/institutions that are proposed to be responsible to undertake the monitoring as well as the oversight responsibilities for correct implementation of the monitoring function. A timeframe would be presented. The monitoring plan will be based on applicable WB group policies and Mongolian legislation related to monitoring of metallurgical plants, iron ore and coal mines and associated investments and activities.

Capacity Development - The ESIA shall identify all the partners, official agencies and individuals whose cooperation and participation is essential to implement the project, assess their capacity to fulfill the roles and responsibilities required, and include a realistic plan to ensure the needed capacity is in place to meet the schedule of implementation. The Consultant will review the skills and capacity with concerned regulators responsible for review of ESSS and ESIA documents, permitting and monitoring and enforcement. This review will also be done in view of the required future frequency and type of inspections to monitor compliance with the permit conditions, such as mission monitoring obligations and (annual) environmental reporting. Based on this review, the Consultant will prepare recommendations and propose a plan for capacity building that will focus on providing expertise related to the typical type of mitigation measures which concessionaire/investor would be expected to integrate in the designs and the construction of the Integrated Steel Complex.

The Environmental and Social Management Plan will also indicate whether there would be a need for an independent Environmental Supervision Engineer during the construction of the Integrated Steel Complex. The ESIA consultants will prepare the TOR for this work in case this is required.

Compliance Framework for Environmental Supervision

Environmental specifications for construction and operation phases of the project shall be identified in the Environmental Management Plan. These may include:

• Management Plan for Physical Cultural Resources (including Chance Finds procedures)

• Land Acquisition and Resettlement Plans • Rehabilitation plans for temporarily affected sites and borrow sites • Natural Habitat management plan and Biodiversity Action Plan • Worker and Public Health and safety plans for construction and operations • Impact on livestock and agriculture • Public communication program

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• Traffic safety and transportation plan • Dust suppression, noise and vibration control plan during construction and operation • Air pollution and Emission of particulate matter and dust • Plan to protect construction site from outside influence and camp management plan • Indigenous Peoples Development Plan • Construction spoils and solid waste handling and disposal • Safety operation plan for tailings dams and reservoirs • Long term monitoring plan • Contingency works plan • Grievance Management plan (Grievances from Affected Communities and external

communications from other stakeholders are responded to and managed appropriately),

• Identification of roles and responsibilities of the implementation organization and various stakeholders to accomplish the EMP, assessment of the capacity to deliver those responsibilities, and recommendations for budgeting and technical assistance for capacity building and support for EMP implementation.

The Environmental Management Plan shall also identify a compliance framework including penalties for non-compliance with the specifications listed. A Terms of Reference for Environmental Supervision during Project Construction should be developed as an attachment to the Environment Management Plan that outlines this framework

4.1.14 Mine Reclamation and Closure Plan

The preparation of the Mine Reclamation and Closure Plan (MRCP) is a responsibility of the investor. However, the Consultant under the ESIA will prepare a set of conditions, requirements and recommendations for the MRCP for the Tumurtei and Tumurtolgoi iron ore mines as well as for coal mine to be identified by the Feasibility Study. For this task the Consultant should further consider that:

i) future public health and safety are not compromised; ii) the after-use of the site is beneficial and sustainable to the affected communities in the

long term; and iii) adverse socio-economic impacts are minimized and socio-economic benefits are

maximized.

4.1.15 Plan for State and Public Consultation

The Consultant shall prepare a plan in compliance with the WB requirements, taking consideration relevant national regulations, including:

• A description of regulatory, World Bank`s requirements for consultation and disclosure; • Local legal framework of consultation activities and Project disclosure requirements,

particularly in respect of those public consultation activities that are directly required under the local permitting process;

• Identification of all stakeholders and potentially affected groups; • Record of any consultation activities undertaken to date/prior to the Consultant`s

involvement; • Action plan for further consultation during preparation, construction and operations

phases of the Project, including details on appropriate formats for effective and culturally meaningful interaction with all relevant stakeholders;

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• The development of a grievance mechanism; • A disclosure plan with timetable of events and activities (what is to be disclosed, how,

when and for how long), including identification of any locations where relevant Project documentation will be available locally and elsewhere.

The scope and level of detail of the plan should be scaled to fit the needs of the Project.

Once the draft ESIA, including EMP, has been prepared, the Consultant will have it translated into Mongolian language after approval and integration of comments from the Government, the World Bank and the Panel of Experts and considered fit for purpose for public disclosure by other IFIs and potential financiers. The Consultant will be responsible for organization of public consultations of the ESIA. Public consultation and communication will be undertaken on the basis of the World Bank Policy on Environmental Assessment (OP/BP 4.01), Mongolian legislation, Aarhus Convention, good international practices and based on the approved Plan for State and Public Consultation as developed during the Scoping and ESIA phases. The consultation process will include standard record keeping for each meeting: a formal record should be made including the agenda, signed lists of participants, a summary of the issues discussed and copies of materials provided to the participants. The consultation process will also foresee for a continuous communication place where interested citizens and stakeholders can obtain information about the proposed Project.

The Consultant, will finalize the ESIA based upon the outcomes from the Public Consultations and then support the Government in the public disclosure of the Final ESIA document. The consultant will also prepare a summary of all public comments received and responses to them explaining how the comments have been taken into consideration in the project.

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5. Deliverables by the Consultant 5.1 Introduction

The Feasibility Study and the Environmental and Social Impact Assessment shall be performed simultaneously under individual agreements with separate Consultants. The Feasibility Study shall include engineering, technical, financial, economic, legal and institutional studies used for developing the project concept and justifications for its implementation. The Environmental and Social Impact Assessment will include information collected during public consultations. Results from these two consultancies will establish the basis for decisions on implementation of the project.

5.2 Deliverables Deliverables produced as a result of this TOR will packaged as described in this section. The Consultant must provide written monthly progress reports during the implementation of the Project to avoid unexpected problems and to resolve problems in a timely manner. The inception reports, monthly progress reports and any other reports must be prepared in English and Mongolian. The Inception Report shall include the work plan and schedule and be clearly written.

The special and general drafts and final reports will be prepared in both English and Mongolian. The Draft Final Reports must be printed in Mongolian and be submitted to the Client, the Ministry of Industry, and Panel of Experts and to the Public Representatives for comments.

All reports will be delivered electronically in Adobe PDF format for both Mongolian and English versions, with hard copies in the quantities as specified elsewhere in the contract.

5.1.1 Progress Reporting All reports listed below should be submitted in English and Mongolian. Unless otherwise stated, reports are submitted to the World Bank through the PIU according to the schedule given below.

Inception Report: The inception report should be submitted in English to the PIU 30 days after the date of Contract Award. The Inception Report shall include the review of the available reference documents and baseline environmental and social data and provide an overview of applicable standards for steel making plants in line with WB Guidelines and Mongolian legislations. The Inception Report will also outline the detailed work plan.

Proposed Work Program. The proposed work program should be submitted in English to the Technical Steering Committee 30 days after the date of Contract Award.

Progress Reports: Progress reports should be submitted in English to the PIU monthly, following contract signature. The progress report should present a very brief overview of progress in completing the tasks, difficulties in achieving the work as described in the contract, proposed alternate means to achieve the Project objectives, status of budget and major scheduled milestones. It is anticipated that progress reports would be 1-3 pages maximum in length.

5.1.2 Environmental and Social Impact Assessment Draft Environmental and Social Scoping Study (ESSS)

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The draft ESSS and communication and consultation plan will be submitted within three months after contract signature. This will be accompanied by the proposed draft detailed work plan for the ESIA and will also present the overview of all environmental and social baseline data. This will include an overview of all the environmental baseline data available and, based on the data gap analysis, the baseline data which are still required to be collected during the ESIA phase including the work-plan how to collect these data.

It will also present the requirements for emissions and impact (computer) modeling in line with acceptable international and national standards and the justification that the proposed model is widely accepted for the required application under the proposed project and is suitable for the specific conditions in the project area. The draft scoping report will also contain the full detailed methodology for the social assessment (based on robust sampling base of at least 20% of affected population and entities).

The Draft ESSS will be the basis of the organization of the first public hearings after the draft ESSS has been approved by the Client and the World Bank and after review of the Panel of Experts.

Final Environmental and Social Scoping Study Report

After the organization of the first round of public hearings, taking into account the comments received the Consultant will submit the final ESSS and detailed scope of work including work plan for the ESIA within 4 (four) months after contract signature.

Draft Environmental and Social Impact Assessment (ESIA)

The draft ESIA, including an Executive Summary, will be submitted after approval of the Final ESSS and the detailed scope of work and work plan for the EISA. The draft ESIA will have to be submitted no later than (6) six months after contract signature and will include the draft Environmental Management Plan, which will include the key mitigation measures. The draft ESIA will be based on the technology that identified by the FS. This will also include the different topographic maps reflecting the scenarios for the project development plans and phasing.

The draft ESIA will also include a separate report about the results of the Social Assessment based on a statistically reliable and representative primary household survey data of at least 20% of the affected population and with the recommendations for the community development priorities and community investments and proposed implementation mechanisms.

The draft ESIA shall also include the specific management plans required as a result of the impact assessment. These should include a Cultural Heritage Management Plan, A Biodiversity Action Plan, a Water Resources Management Plan and a Cumulative Impact Action Plan, a Resettlement Action Plan and an Indigenous Peoples Plan. Both the Resettlement Action Plan and the Indigenous Peoples Plan shall be prepared as separate documents attached to the Environmental Management Plan. For both resettlement impacts and for impacts on indigenous peoples, World Bank safeguard polices require the use of site specific action plans whenever the sites or alignments creating impacts are known or selected. Planning or policy frameworks are only required when specific sites or alignments are still unknown or undecided. A clear rationale should be provided for both resettlement and indigenous people’s planning instruments chosen. Annex 3 and Annex 4 of the MINIS Environmental and Social Management Framework provide guidelines on the development of these instruments.

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Final Environmental and Social Impact Assessment

The final ESIA including Environmental Management Plan will be submitted after integration of comments from the Client, the World Bank and the Panel of Experts no later than 7 (seven) months after contract signature.

The Reports should provide complete details of all work performed, and analyses made. This report will build upon the ESSS reports completed previously and integrate comments received from the Government of Mongolia, the World Bank, Panel of Experts and other reviewers, and include issues raised and discussed at workshops and review meetings, in addition to written comments.

The Final ESIAs will be delivered to the PIU, and shall be reviewed and by the MoEGDT. Final ESIA will include the necessary subsidiary reports to meet the specific Safeguard Policies and requirements of this TOR, including the Environmental Management Plan, final Resettlement Policy Framework and Resettlement Action Plan.

Public Consultation Program Report-The Consultation and Communications Program Report should be submitted to the PIU according to the time schedule set out below. The PIU and Project Steering Committee will organize review meetings and maintain written minutes of meetings to record the major comments.

The Consultation and Communications Program Report will be delivered to the PIU and should include soft copies of the database of meeting minutes and other public contact records.

Reports should follow World Bank and Government of Mongolia requirements for content and format.

The Consultant should allow for at least two weeks review period before consolidated comments will be received for each reporting.

6. Management of the ESIA Work 6.1 Roles and Responsibilities

Roles and Responsibilities of Project Implementing Unit: The Project Implementing Unit (PIU) is responsible for providing managerial guidance and monitoring progress of the Environmental and Social Impact Assessment. The PIU shall monitor the fulfillments of the Consultant and shall receive the reports on the Project from the Consultant for review and approval by related organizations. The PIU shall monitor the activities of the Consultant all times and shall report to the Client.

Roles and Responsibilities of the Client: The Client for the Project is the Ministry of Industry of Mongolia. The Working Group shall perform the monitoring with assistance of PIU during the Study Phase. The Working Group shall review and discuss the reports on Project phases and shall grant necessary approvals when required. The Government will hire an independent Panel of Experts for review of the ESSS and ESIA. This Panel of Experts will be an advisory panel consisting of independent, experienced environmental and social scientists with the task to advice on all aspects of the proposed Project relevant to the ESIA.

Roles and Responsibilities of the Consultant: To ensure fulfillment of Environmental and Social Impact Assessment within a timeframe, the Consultant will be fully responsible for regulating their activities under transparent and integrated management. The Consultant shall be responsible for ensuring work interrelations, exchanging official information and organizing

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meetings with Consultant’s management and other key and non-key experts—as required-and in a timely manner. In addition, the Consultant will submit work fulfillments and will hand over reports to the PIU and the Client in compliance with Work Schedule for discussion and approval after including their recommendations.

6.2 Consultant Time Schedule The work of the Consultant will be supervised by the PIU, which will be the focal point for coordination with all other ministries, agencies and any other international institutions. It will also provide liaison and contacts with the academic and applied research institutions, Civil Society Organizations and Non-governmental Organizations.

The following Tables 1 present the timing of major milestone events for the production of the reports described above. The Consultants Team should begin work upon contract signature. The Consultants Team should submit a detailed work plan and schedule with critical milestones with allowance for PIU and external reviews.

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Table1.Reporting Schedule

Environmental and social scoping study (ESSS) and Environmental and Social Impact Assessment (ESIA) indicative schedule

Month 1 2 3 4 5 6 7 8 9 10 11 12

Develop and submit Inception Report and Work Program

Submit Annotated Outline of ESIA and Subsidiary Reports

Undertake studies and develop Draft ESSS

Finalize ESSS

Undertake studies and develop Draft ESIA Report

Public Consultations and Communications Reporting

Finalize Environmental and Social Assessments

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The Consultant shall start work upon signing a contract.

6.3 Ownership and Control of Information, Data and Documents All information and data, all intellectual property rights, ownership, licensing provided to the Consultant Team shall be used only for this Study and assessment.

Documents and information/data provided to and/or generated by the Consultant Team shall not be disclosed without the expressed written consent of the PIU.

7. Requirements for the Consultant Team The Consulting Team should be a consulting firm or a consortium experienced in performing work on projects similar in size and complexity. Consultants may associate with other firms in the form of a joint venture or a sub consultancy to enhance their qualifications

Consultant Team will determine the identity and biography of experts to be involved in specific positions within the Consultant Team. Furthermore, the Constultant Team will qualify main members of the Consultant Team and all essential specialists immediately. Identification of Consultant Team leader and his Deputy can be named at a later date.Consultant Team must confirm that all specialists are available to work during the Project implementationperiod and shall develop a schedule of key staff positions with a dedicate number of months for each position as part of the detailed work plan submitted at Inception.

Table 7.1 Provisional Estimated Key Staff Inputs for Detailed ESIA with public consultation Key Staff Positions Man-Months The Leader for Environmental and Social Assessment Team 8

Environmental and Social Assessment Specialist 3 Air modeling and Monitoring Specialist 3 Water Resource Management Specialist 2 Metereologist 2 Hydrogeologist 2 Geological Engineer 2 Environmental Engineer 4 Biologist/biodiversity specialist 3 Social Specialist 4 Land Management and Resettlement Specialist 3 GIS Specialist 3 Soil Researcher 3 Archeologist 3 Anthropologist 3 TOTAL 48

Minimum qualification requirements of Consultant Team specialists for the ESIA with public consultation are presented below:

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ESIA Team Leader

• a strong background in mining and steel making/ore processing; • proven experience in preparation of environmental and social impact assessments for

steel making plants and mining operations which led to successfully obtaining the relevant permits;

• Must hold a university degree in civil engineering, geology, chemistry or other related fields;

• Must have at least 15 years of general professional experience in related fields; • It is competative advantage if have a experience of management and coordination in

similar project in; • Experienced with similar projects with government, civil society and public; • Experienced with studies and research according international requirements; • Has demonstrated the capability to coordinate efficiently multi-directional project

implementation including related participants and companies; • Qualified to consult and manage project staff and specialists; • Possess sound organizational skills and able to deliver assignments in a timely manner

often under severe time pressures; • Demonstrated initiative in developing practical approaches that improve efficiency and

effectiveness of the project and establish priorities; • Have strong inter-personnel skills and commitment to work in a team-oriented project; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Environmental and Social AssessmentSpecialist

• Should have a minimum of 10 years project management experience in environmental and social impact assessments, nature resource utilization planning, land planning strategy and environmental impact assessments

• Have a Master’s degree in environmental management, impact assessment or area planning;

• Have work experience less than 5 years with environmental impact assessments at overall level implemented by World bank and International Financial corporation in developing countries;

• Have research experience and good decision making skills; • Ability to analyze and summarize multi type of information • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Air Modeling and Monitoring Specialist

• Proven experience in air dispersion modeling and collection of relevant air monitoring data;

• Must hold university degree (preferably graduate degree) in relevant environmental disciplines (meteorology, atmospheric chemistry or atmospheric physics);

• must have at least 10 years of professional experience with particular experience air modeling using advanced internationally well accepted impact (computer) models and experience with dispersion modeling of steel making plants, transportation emissions and open-cast mining;

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• Have research experience and good decision making skills; • Ability to analyze and summarize multi type of information • Fluent oral and written English;

• Proficient inPC based software applications relevant to the ESIA scope;

Water Resource Management Specialist

• Proven experience in collection of water resources and water use baseline data, preparation of water balances and modeling of realistic water use scenarios and preferably as well with impact analysis of water extraction of steel making plants and open pit mining activities;

• Must hold a university degree in relevant engineering disciplines or environmental engineering;

• Have at least 15 years of professional experience and at least 10 years experience in the fields as mentioned above;

• Have research experience and good decision making skills; • Ability to analyze and summarize multi type of information

• Fluent oral and written English;

Land Management and Resettlement Specialist

• Should have a minimum of 10 years experience with land management issues and implementing donor organization resettlement policies;

• Have a Master’s degree or higher in a related field; • Have work experience with environmental impact assessments at overall level

implemented by World Bank and International Financial Corporation in developing countries;

• Have research experience and good decision making skills; • Ability to analyze and summarize multi type of information • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Social Specialist

• Should have a post-graduate degree; • Have at least 10 years of professional experience in social impact assessments,

development of social management plans, land acquisition and involuntary resettlement, stakeholder engagement and community development projects, preferably with private sector projects;

• Have substantial international experience with socio-economic assessments, preferably in the context of social assessments in mining and steel making projects;

• Should be experienced in the collection and analysis of socio-economic data and preferably have experience with Corporate Social Responsibility (CSR) programs;

• Practical experience with the implementation of recognized international standards (e.g. IFC PSs, EBRD PRs, etc) is also preferred;

• Ability to analyze and summarize multi type of information • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

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Environmental Engineer

• Must hold a university degree in civil engineering, geology, chemistry or other related fields;

• With a strong background in mining and steel making; • proven experience in WB Group standards; • Must have at least 15 years of general professional experience; must have at least 10

years of professional experience in the fields as described above.

• Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and establish priorities;

• Have strong inter-personnel skills and commitment to work in a team-oriented project; • Fluent oral and written English;

• Proficient inPC based software and GIS applications relevant to the ESIA scope;

Meteorologist

• A Master’s or higher degree in Meteorology. Should have a minimum of 10 years work experience;

• Have professional software skills to process and summarize weather data; • Demonstrated initiative in developing practical approaches that improve efficiency and

effectiveness of the project; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Hydrogeologist

• A Master’s or higher degree in hydrogeology or a related technical field; • Should have a minimum of 10 years work experience of underground water investigation

in Mongolia. It is competative advantage if have a work experience in similar project in Mongolia;

• Possess professional skill to process; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Geological Engineer

• Should have master or higher degree in geology; • Should have a minimum of 10 years work experience in his profession; • Experienced in geological survey implemented in Mongolia or similar region; • Information on the development of professional skills and have experience working on

computational modeling; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

Biologist/Biodiversity Specialist

• University degree in Biology. Should have a minimum of 10 years work experience; • Extensive knowledge of local species of fauna and flora and previous work experience in

the region would be an advantage; • Have work experience in similar projects;

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• Experiences in research according international requirements; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

GIS specialist

• Have a Bachelor’s degree in geography, hydrology, ecology or environmental; • Have professional skill for GIS software and process data • Have a minimum 8 years work experience as GIS specialist, with at least one year

experience with the specific GIS software used by the MEGDT; • Possess professional skill to process information and work experience in estimation

modeling; • Demonstrated initiative in developing practical approaches that improve efficiency and

effectiveness of the project and establish priorities; • Have strong inter-personnel skills and commitment to work in a team-oriented project; • Fluent oral and written English; • Proficient inPC based software and GIS applications relevant to the ESIA scope;

Soil Specialist

• A Master’s or higher degree in soil science. Should have a minimum of 10 years work experience;

• Experiences in research according international requirements; • Professional skill to process data; • Demonstrated initiative in developing practical approaches that improve efficiency and

effectiveness of the project; • Fluent oral and written English; • Proficient inPC based software applications relevant to the ESIA scope;

The Consultant may propose an alternative team structure or may add required specialists who are not listed in above.

The ESIA Consultant will be required to have a project office in Ulaanbaatar to properly accomplish the work described in this TOR, and be prepared for travel to remote areas with minimal infrastructure to accomplish field work requirements.

Archaeologist

• A Master’s or higher degree in Archaeology or related discipline. Should have a minimum of 10 years work experience in cultural heritage management;

• Have work experience in similar projects;

• Experienced to assess tangible and intangible cultural heritage and develop appropriate management plans;

• Experiences in research according international requirements

• Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;

• Fluent oral and written English;

• Proficient in PC based software applications relevant to the ESIA scope;

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Anthropologist

• A Master’s or higher degree in Anthropology or related discipline. Should have a minimum of 10 years work experience in cultural heritage management and stakeholder engagement;

• Have work experience in similar projects;

• Experience in conducting and documenting free, prior and informed public consultations and developing tools and processes for including vulnerable social groups such as women, youth and minorities in community engagement programmes

• Experienced to assess tangible and intangible cultural heritage of vulnerable cultural groups inhabiting the project area and develop appropriate management plans;

• Experiences in research according international requirements

• Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;

• Fluent oral and written English;

• Proficient in PC based software applications relevant to the ESIA scope;

8. Payment Schedule The lump sum fee would be paid in the following manner:

Payment schedule:

• Ten percent (10%) as an advance payment against the submission of a bank guarantee for the amount.

• Five percent (5%) upon acceptance of the Inception Report/Work Program and the Consultation and Communications Program.

• Five percent (5%) upon acceptance of the Annotated Outline of Environmental and Social Impact Assessment Report or the Sub-Studies Reports.

• Thirty percent (30%) upon receiving an approval letter from the Client and upon acceptance of the Final Environmental Scoping Report along with Plan for State and Public Consultation.

• Thirty percent (30%) upon acceptance of the Environmental and Social Impact Assessment Report or the Sub-Studies Reports.

• Twenty percent (20%) after receiving an approval letter from the Client and upon acceptance of the Final Environmental and Social Impact Assessment Report or the Sub-Studies Report by the MoEGDT.

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